Teaching Kids About Money
I think that learning about money from a young age is very empowering for children. Learning how to look after money, what things cost and how to save helps set children up for good relationships with money.
We feel very strongly about our children learning how to save their money to buy the things they want. We talk to them regularly about the value of hard work and why saving your money to buy what you want makes buying that special toy for example even sweeter.
We give our children small amounts of spending money for completing chores around the house, just 20p here or 50p there slowly adds up. So they might get money for folding laundry, helping wash the cars etc as well as spending money instead of a magazine at the supermarket for example. LissyLou and C are both still very young at 4 and 5 but I think this is the perfect time to be starting the discussions about how much things cost and how to save up.
A recent survey by the Money Advice Service found that 58% of parents find it difficult to talk to their children about money. Dr Elizabeth Kilbey, a child psychologist, had the following advice for parents:
“Having tough conversations with your children is part and parcel of being a parent and money can be a subject many find particularly hard to cover, especially if it is an area which they struggle with themselves. One of the key reasons for many parents is that they feel children shouldn’t be burdened with adult responsibilities, like worries about money. But it can in fact be very empowering to give your children skills and confidence with money, so that they don’t have to face money worries in the future.”
I personally find talking about money with our children very easy, we talk about things we can’t afford to buy, or things we need to save up for. But I can understand why people would find that difficult. Sometimes I think that by making money real, starting with small amounts is a nice way in to talk about money. Dr Kilbey has come up with five top tips that might help:
Five Tops Tips from Dr Elizabeth Kilbey on talking money with your children
- Subtly integrate it into your child’s life. You don’t have to have a big ‘money chat’ to bring up the idea of good money management. When you go shopping for example, encourage your child to make a choice between two items so they understand they can’t ‘have it all’ or explain to them that whilst two products are very similar, one is cheaper and it can be sensible to go for that one.
- It’s never too young to start. My own experience backs up the Money Advice Service’s academic study which shows that money habits begin to be developed prior to the age of seven. Children shouldn’t have to worry about family finances, but you can help them understand money without doing this.
- Be confident. This is your opportunity to help your children develop positive, beneficial habits. Even if you aren’t the best at money management, you will still have lots you can pass on to your children.
- Have a go. Money is a very practical subject and children can be very hands on learners. Find ways for your children to handle and use money whenever possible and having pocket money can be a great way of doing this. In younger children, role play can be used – for example playing ‘shop’ using pretend money.
- It’s ok to make a few mistakes; it’s how we all learn, and that applies to money as well. It’s far better for children to be making mistakes with little or no consequences than them facing bigger money issues when they are older which could have a bigger impact.
To find out more about helping children to understand money www.moneyadviceservice.org.uk
I’d like to add a few of my own tips, things that I think help make money discussions real and easy:
- A great way to start talking about money is by playing with money with your child. Do ‘brass rubbings’ talk about the shape of coins, their value, add and subtract them. Play shops at home by labelling toys and food items and letting your child visit the ‘shop’ and be the shopkeeper. Start with items priced as single coins and slowly build the prices so that they have to use more than one coin
- Have a piggybank. Let your child visually see their money grow. Then count up the coins together and discuss what they could buy
- Open them a savings account. Make sure that they save some of the money from their piggybank, maybe just a small portion of their money but show them how they can save for a bigger item over a longer period. This is especially useful as they get bigger.
Do you have any tips for teaching kids about money? Please share them in the comments!
This post is in collaboration with the Money Advice Service